SIE Understanding Trading, Customer Accounts and Prohibited Activities Question 59: Answer and Explanation

Question: 59

Which of the following statements is true regarding proxies?

• A. FINRA Rule 2251 governs proxies for owners of stocks, corporate bonds, and municipal bonds.
• B. A FINRA member must provide proxy materials to the beneficial owner of stock whether or not the issuer provides enough copies of proxy materials.
• C. A FINRA member must provide proxy materials to the beneficial owner of stock whether or not the issuer requests this service.
• D. A shareholder may authorize another party to cast the votes which the shareholder is entitled to cast.

Correct Answer: D

Explanation:

D: Choice D is correct because proxy voting is a common practice for shareholder voting. Choice A is incorrect because the MSRB governs proxy activities for municipal bonds. Choices B and C are incorrect because FINRA must provide proxy materials to the beneficial owner only if enough copies are provided, and the service is requested.